Reliance Communication (RCOM) reported a net loss of Rs 130 crore for the quarter ended December 31, 2017. This is an improvement from the previous quarter (ended September 30), when losses were Rs 2,712 crore, the company informed BSE.
The company mentioned that this sharp drop of over 95 per cent in quarterly losses was due to their planned exit from consumer business, which comprised of wireless, direct to home and PCO.
RCOM’s disinvestment of the its wireless network was enabled by Mukesh Ambani’s Reliance Jio, which bought RCOM’s wireless infrastructure assets that includes towers, optic fibre cable network, spectrum, and media convergence nodes in an all-cash deal.
Some highlights from financials
- The company’s new business portfolio reported consolidated revenues of Rs 1,305 crore in the December quarter. Of this, Indian operations’ revenues contributed Rs 596 crore or 45.7%, while global operations’ revenue contribution stood at Rs 709 crore or 54.3%. There was a quarter over quarter (QoQ) increase in total revenue of 2.1 per cent.
- RCOM’s total earnings before interest, taxes, depreciation, and amortization (EBITDA) in this quarter were Rs 252 crore, an increase of 5.9 per cent QoQ. Indian operations’ EBITDA stood at Rs. 95 crore; while global business contributed EBITDA of Rs. 157 crore.
- Further, RCOM also recorded an increase in profit after tax (PAT) in its new business portfolio by 28.6 per cent, touching Rs 27 crore this quarter.
RCOM’s new business portfolio comprises Business to Business (B2B) operations namely Global and Indian enterprise, internet data centres (IDC), global submarine cable network and international long distance voice with nearly 40,000 customers.
RCOM announced its plans to construct a 22,000 km undersea cable network at an investment of $600 million, earlier this month. The company’s Global Cloud XChange (GCX), will build a submarine cable systems, which would span from Mumbai to Italy in the west and Hong Kong in the east.
According to RCOM’s chief executive officer Bill Barney, GCX’s revenue would jump threefold to about $1 billion annually in the next five years.
Notably, global ratings agency Fitch recently downgraded GCX from B- to CCC rating.
Sale of DTH business
In November 2017, RCOM agreed to sell its Reliance BIG TV business to Pantel Technologies Pvt. Ltd and Veecon Media and Television Ltd. Veecom will take over all of Reliance BIG TV’s contingent liabilities. The sale was made through a binding share purchase agreement with the companies, which acquired the entire shareholding of Reliance BIG TV with business on an “as-is, where-is” basis.